The Maharashtra Real Estate Regulatory Authority (MahaRERA) directed Larsen & Toubro (L&T) Realty to issue refunds to homebuyers of the Crescent Bay project in Central Mumbai, deducting only 2% of the total consideration amount. This ruling was in response to complaints from two homebuyers who had invested in the project in 2015, citing significant delays in possession as the primary reason for withdrawing from the deal.
The 2015 Investment and Unmet Expectations
The case revolves around two homebuyers, Mitali Enterprises and Himgiri Associates, who booked apartments in L&T Realty's Crescent Bay project located in the premium Parel area of Mumbai. When they made their purchases in 2015, the expectation was that possession would be handed over by 2019. However, with no handover in sight by that time, both parties decided to withdraw from the project. Their frustration with the delays led them to file complaints with MahaRERA, seeking a refund of the amount they had already paid, along with interest and compensation for the delayed delivery of the flats.
The homebuyers argued that L&T Realty had violated the terms of their agreement by not delivering the apartments on time. Despite repeated communications, the developer had failed to provide a refund, even though it had acknowledged the request for cancellation in 2021. The buyers sought recourse under the Real Estate (Regulation and Development) Act (RERA), hoping to recover their investments and hold the developer accountable for the delay.
L&T Realty’s Defense: No Specific Possession Date Promised
L&T Realty countered the claims by denying any wrongdoing. The developer asserted that no specific date for possession was mentioned in the booking agreement. While the homebuyers insisted that possession had been promised by 2019, L&T Realty maintained that the project was scheduled for completion in 2023, as per a revised MahaRERA timeline. The company also pointed out that it had obtained the Occupation Certificate (OC) for the project in January 2022, well ahead of the revised deadline, thus demonstrating compliance with regulatory requirements.
Moreover, L&T Realty accused the homebuyers of failing to meet their obligations by not executing registered agreements for sale, as stipulated in the booking forms. According to the developer, this constituted a default on the part of the buyers, further complicating their claim for a refund.
MahaRERA’s Examination and Findings
After carefully considering the arguments from both sides, MahaRERA ruled that the homebuyers had failed to provide sufficient documentary evidence to support their claims. Specifically, there was no written proof that L&T Realty had committed to a possession date of 2019. The booking application forms from July 2015 did not include a specific deadline for handover, which weakened the buyers' case for seeking a full refund based on delayed possession.
MahaRERA also noted that the homebuyers had filed their complaints only after L&T Realty had obtained the OC for the project in early 2022. By that time, the flats were ready for possession, which significantly undermined the buyers' justification for withdrawing from the project and requesting a refund with interest.
Final Ruling: Partial Refund Without Interest
In its final ruling, MahaRERA concluded that L&T Realty was not in violation of Section 18 of RERA, which governs delays in possession and outlines the conditions under which a buyer is entitled to a refund with interest. Since the homebuyers could not prove that the developer had promised a 2019 possession date, and with the project having been completed by January 2022, the regulatory body rejected their claim for a full refund with interest.
However, MahaRERA did acknowledge the buyers' right to withdraw from the project and directed L&T Realty to refund the amount paid by the homebuyers, after deducting 2% of the total consideration amount. The deductions would exclude any statutory dues or brokerage fees, if applicable. The authority gave L&T Realty 45 days from the order date of September 30, 2024, to process the refund. The total amount paid by the homebuyers—₹58.81 lakh and ₹59.37 lakh—accounted for around 20% of the total value of the flats, which were priced at ₹2.97 crore and ₹2.85 crore, respectively.
Implications of the Ruling
The MahaRERA ruling serves as a vital precedent for both developers and homebuyers in Maharashtra’s real estate market. While the regulatory authority acknowledged the buyers' concerns regarding the delay, it emphasized the importance of having clearly defined and documented timelines in real estate agreements. In the absence of a written commitment regarding the date of possession, it becomes challenging for buyers to demand compensation or a full refund. This case highlights the need for all parties to ensure that key details, such as possession deadlines, are explicitly outlined in the agreement to avoid future disputes.
Image source- maharera.maharashtra
